British Gas pledges to simplify energy tariffs

British Gas has revealed it is planning to simplify energy tariffs and provide greater transparency in its billing system, in a bid to regain public trust in the energy sector.

Speaking to the BBC yesterday (November 23), British Gas admitted it had not "made it easy for customers", and as a result would be simplifying its tariff and billing system.

British Gas managing director Phil Bentley told the BBC that "it's clear that we need to make things better for our customers. To make sure we do that, I'm committed to having an honest conversation with (them). We are very conscious of our social responsibility."

As part of the changes, British Gas said it intends to offer two tariffs, variable and fixed, as well as providing customers with a "complete breakdown" of all the costs in their bills.

Ofgem has welcomed British Gas's recognition of its request for suppliers to provide "an open and honest dialogue with their customers", adding that a key objective of its reform programme is to "restore consumer trust".

As part of its report Ofgem put forward its preferred model for addressing tariff complexity and said it was looking to break the "stranglehold of the Big Six energy suppliers".

It also called for consistency in the way suppliers publish the price of all tariffs to enable consumers to easily compare standard and fixed term tariffs, as well as the introduction of "more innovative tariffs".

Commenting on the decision, Ofgem partner for markets Ian Marlee, said "All suppliers must play it straight with consumers and we are pleased to see British Gas, SSE and E.ON responding to this by launching specific initiatives to improve transparency for customers.

"As part of urgently restoring confidence we are calling on all suppliers to get behind Ofgem's reforms to deliver what consumers tell us they want; a simpler, more competitive energy market. Without the decisive break with the past that Ofgem's reforms offer, consumers will continue to mistrust energy suppliers.

However, Mr Marlee warned that Ofgem would be continuing to closely examine British Gas' proposals to monitor how far they meet its objectives to simplify tariffs.

Meanwhile, E.ON said it would be conducting a six-month review in which it would look at tariffs, bills, customer support and how it sells its products.

Consumer watchdog Consumer Focus also welcomed the news with its director of policy and external affairs Adam Scorer, exclaiming that "the penny has dropped", adding that as "energy is a simple product, it should also be a simple market".

He added that while "reducing the number and complexity of tariffs won't bring prices down by itself", that it would "help people understand their energy costs and get the best deal available".